The president of the Petroleum and Natural Gas Senior Staff Association of Nigeria, Festus Osifo, has predicted that if the fuel subsidy is removed, petrol will be sold for less than N500 per liter.
This is in accordance with a statement published following the National Executive Council meeting of his association, which took place on March 28 in Abuja, the federal capital of Nigeria.
The Nigerian National Petroleum Corporation Limited, which is the sole importer of premium motor spirit, and the exchange rate set by the Central Bank of Nigeria, according to Osifo, are the deciding factors for pricing.
“The NNPC is currently Nigeria’s only source of PMS imports. The CBN’s exchange rate, which the NNPC uses, gives between N400 and N450 depending on the day and the window you are viewing. Hence, if you factor that into the model today, PMS should sell for somewhere between N360 and N400.
“Despite continuing to support the full deregulation of the industry and the tremendous advancement made in this direction, we counsel that efforts be made to quicken the pace of the current rehabilitation exercise of refineries and get them back on track in due time.”
Nevertheless, participants in a recent webinar with the title “Deregulation of the Nigerian Downstream Sector: The Day After” claimed that after the subsidy is eliminated, Nigerians may have to pay up to N750 per liter for fuel. Some stakeholders contend that the only way the estimated price can decrease is if marketers are given access to foreign currency at the official CBN rate.
Fuel is currently sold for as much as N250 to N300 per liter, according to oil and gas analyst, Kayode Oluwadare. He predicts that when fuel subsidies are eliminated, such filling stations might sell for as much as N750 and N800 per liter. Food and transportation costs would rise even more as a result, especially for people who live outside of large cities like Lagos, Abuja, and Port Harcourt.
Fuel subsidies will be eliminated by the Muhammadu Buhari administration before it leaves office on May 29, 2023. The finance minister of Nigeria, Dr. Zainab Ahmed, has previously stated that it will be preferable to progressively eliminate subsidies beginning in the second quarter of 2023 in order to lessen the burden on Nigerians who are already suffering from a 21.91% inflation rate.
President-elect, Bola Ahmed Tinubu stated in his campaign platform that his administration plans to eliminate fuel subsidies and put in place social welfare programs to assist Nigerians in adjusting to the elimination. He is focusing on the provision of water supply, healthcare, education, and transportation for the implementation of these projects.
To further lower fuel prices, Tinubu also intends to concentrate on the continuing restoration of the country’s refineries.
Nigeria’s production of crude oil is rising gradually. The country was turning out 1.3 million barrels of oil a day as of February 2023.
